The EBA publishes Report on banks’ dry run testing of their recovery plans

The European Banking Authority (EBA) today published a Report comparing how banks test the implementation of their recovery plans through so-called "dry runs". In a context of heightened uncertainty and the continued need for operational preparedness and resilience to unexpected stress events, the analysis confirms that dry runs are an effective tool to strengthen the operationalisation of recovery plans and enhance institutions' crisis readiness. When used meaningfully, dry runs improve institutions' ability to respond to stress situations in a timely and credible manner.

The analysis finds that most institutions recognise the value of dry runs and use the lessons learned to improve their recovery planning arrangements. However, approaches and levels of maturity vary significantly across institutions.

Where dry runs are carried out primarily to meet supervisory expectations, they tend to be less effective, resembling compliance exercises with limited insights and follow-up actions. By contrast, institutions with more advanced practices use dry runs as genuine management tools, fully embedding recovery planning within their broader risk management framework. In these cases, dry runs strengthen internal preparedness by enhancing the credibility, feasibility and organisational understanding of recovery planning arrangements.

Looking ahead, the EBA highlights the importance for institutions to maintain regular, high-quality testing of key recovery plan elements and to continue refining their dry run practices. The Report also points to the potential benefits of stronger synergies and better integration of testing activities across the recovery and resolution, supporting a more effective crisis management continuum.

Legal basis and next steps

In line with the EBA supervisory convergence priorities, under which the usability and testing of recovery plans is a key focus for prudential supervisors in 2026, the EBA has conducted a thematic comparative analysis on recovery plan dry runs. The work also reflects the EBA's broader mandate to contribute to effective recovery and resolution planning.

The Report is particularly timely in light of recent and upcoming developments, including:

• the publication of the EBA Handbook on Simulation Exercises for Resolution Authorities, which sets out methodologies and good practices for coordinated simulation exercises;
• the EBA's preparation its future mandate under the Crisis Management and Deposit Insurance (CMDI) regulatory framework to coordinate EU-wide simulation exercises across competent and resolution authorities.

This benchmarking exercise is not intended to provide prescriptive guidance. Rather, it aims to support institutions in the further development of their dry run practices and to contribute to the establishment of useful benchmarks for their implementation.